In addition sterling was given a boost by stronger data in the form of services sector activity that defied expectations to show an expansion in the last month. Despite the increase in activity, the survey showed that employers shed jobs at the fastest pace in more than a year. Earlier this morning house price data showed that prices fell by 0.9% which was less than expected.

Whilst there was an agreement in the euro zone between France and Germany to solve the crisis, the euro dropped last night. It was on the back of the announcement by credit rating agency S&P that it may carry out a Europe-wide credit rating downgrade if leaders fail to move decisively on solving the region's debt crisis. Despite the proposed Franco-German initiative, the credit rating agency took the unprecedented action of putting all euro countries on warning (aside from Cyprus and Greece that are already either downgraded heavily or on a warning).

In the USA, despite losing ground yesterday on the news of an agreement between France and Germany, the US dollar strengthened back after the move by S&P to warn the 15 European countries. The US dollar is the benchmark of market sentiment - strengthening up and down with the news.

Elsewhere, the Australian dollar weakened overnight as the Reserve Bank of Australia cut interest rates by 0.25%, putting riskier currencies under pressure.

Supplied by Nick Ryder of Smart Currency Exchange, the currency partner to Harpers Wine and Spirit who have teamed up with Smart to provide readers with a free bespoke currency service. Go to www.smartcurrencybusiness.com/winespirit for more information or call on 0207 898 0500.